Billionaire Niel Agrees to $3 Billion of Phone Tower Sales to Cellnex

(Bloomberg) -- Billionaire Xavier Niel’s phone carriers are raising about 2.7 billion euros ($3 billion) of cash through the sale of towers to Cellnex Telecom SA, as they prepare for a wave of investment to boost coverage.

Niel’s Iliad SA and Salt Mobile SA are together selling about 10,700 telecommunications masts to the Spanish tower operator, in three separate deals in France, Italy and Switzerland, the companies said in statements Tuesday.

Shares of Iliad rose 7 percent in early Paris trading, while Cellnex rose 4.2 percent in Madrid.

The proceeds will allow Iliad and Salt to cut debt and counter mounting competition across their markets by helping them finance network-building. Iliad is losing customers amid a price war in France while trying to shake up the Italian market after entering last year, and Salt faces the merger of two rivals, with Sunrise Communications Group AG buying Liberty Global Plc’s Swiss business.

For Iliad, the deals give executives a plan to discuss with shareholders as it hosts its first-ever investor day in Paris on Tuesday, after reporting in-line results that showed customer losses continue.

The company suffered its first broadband subscriber losses last year after long being known as a challenger that lured customers with low-cost offers. Now, Iliad needs to build out its fifth-generation mobile network in Italy and has regulatory obligations to spend on networks in France.

The transactions together represent the most transformative of deals so far for Cellnex, which will boost its portfolio across Europe by more than 50 percent.

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